The Art Of Managing Customer Expectations

The rise of ‘customer power’ in recent years is no accident. Rather, it comes from a hard-headed financial view: namely, when all is said and done, the customer pays the bills…

We have also seen the rise of the destructive side of customer power. Social media can turn a disgruntled customer into an instant virtual terrorist, enlisting hundreds, thousands or even more bystanders in a crusade against a hapless supplier.

The question, then, is how can we make our customers evangelists instead of terrorists? The simple answer is that we have to offer exceptional value and a superior customer experience. This elusive goal is the holy grail of many companies today.

Larger companies embark on market research, customer surveys, big data, collaborative forums, all in the hope that they can hit the sweet spot before it moves again. For some, that level of complexity, workload, and uncertainty is just too cumbersome to deal with, so they rely upon educated guesswork, gut feeling, and customer satisfaction feedback to guide their journey.

However, many organisations often step over the first fundamental starting point – that of knowing and understanding customers’ expectations. After all, how can you begin to meet and exceed customer expectations if you don’t know with some precision what they are?

What IS An ‘Expectation’?

Customer Expectations is a commonplace term, and nearly everyone understands it in a somewhat visceral way. It is so commonplace that we tend to take its meaning for granted. However, of great significance to marketers and researchers is the rarely understood fact that ‘customer expectations’ has two very different meanings. This matters because combining the two meanings leads to confusion and misinterpretation of data.

One type of expectation is a prediction. For example, if I have had consistently bad experiences with a provider, I might reasonably expect (predict) my next experience will also be bad.

The other type is an ideal expectation. In this sense of the word, an expectation is a desired state; it defines the ideal attribute of a product, service, transaction, relationship, or performance desired by a customer.

The heart of the theory of expectations is that customer judgments and, to a significant degree, customer motivations and actions are influenced by perceptions of how well the supplier has performed against their ideal expectations. By aspiring to reach the ideal as the target, companies can set meaningful goals for delivery and overall performance.

Although developed with external customers in mind, expectations theory works equally well within an internal customer framework, for employees of an organisation or the citizens of a community. In fact, its applications in transactions or even social interactions are virtually limitless.

Insights Around Gathering Expectations

The heart of the matter is to ask customers for their expectations. The art is in how the asking is conducted. Simply asking customers for their expectations of a company, product or service is likely to surface both types of expectations. Some customers may see it as an opportunity to vent and recount their grievances and bad experiences. Some may figure they can ask for the sky without taking into account organisational constraints. Yet others might confine their thinking to what they believe is possible or available without giving guidance on what to aim for.

These multiple responses can be a lot to unravel; it is possible, but not preferable.

The good news is that expectations tend to be widely shared by customers. Of course, every customer is unique and will have his or her own set. But once you have talked with more than a handful of customers, the landscape generally becomes clear. Normally, you would identify between thirty and seventy distinct expectations of a supplier. Of these, perhaps fifteen to twenty-five will be widely shared and important to customers. The rest will be expectations for only a few customers.

Expectations are robust and relatively persistent. Obviously, disruptive innovation in an industry can massively affect expectations. But even in quieter industries, it pays to check expectations every few years.

Some customer expectations are nearly universal. For example, customers always want to be treated courteously by knowledgeable employees. (A no-brainer, right? Of course, we all have been “served” by companies that seemingly fail to understand even this basic requirement.) However, any industry will have expectations specific to it; expectations surfaced for one kind of business will not fit another.

Expectations And Customer Surveys

If you truly know your customers’ expectations, everything that follows in the value chain, from your product/service design through to performance and satisfaction assessment, becomes that much more on-target.

Without insight into expectations, most customer satisfaction surveys are either created internally with questions devised by management who are out of touch with customers, or are bland, off-the-shelf questionnaires that don’t speak to the uniqueness of the company and its customers. Such surveys inevitably miss the mark.

Many of us will testify to feeling bombarded by an increasing number of customer surveys that seem poorly constructed, or are just out of sync with what we as the customer think is most important. It is easy to see how the disconnect between the customer and the supplier often starts its journey here. The customer is at risk of becoming increasingly disillusioned, whilst the supplier risks wasting energy and resources on initiatives started from customer feedback that is fundamentally misaligned.

Why not dispense altogether with the notion of customer satisfaction and use the customers’ expectations as the basis for research and performance measurement? Instead, design surveys to measure the gap between customer expectations and customer perception of actual performance. You can also measure competitor performance in the same manner. In so doing, critical areas of opportunity and areas needing improvement are highlighted.

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